Kelley v. California Unemployment Insurance Appeals Board (Feb. 10, 2014, B244098) __ Cal.App.4th __, 2014 Cal. App. LEXIS 128, is a good example of what an employer should do – or rather, shouldn't do – when considering whether to terminate an employee who's scheduled to return to work after a leave of absence.

In April, 2010, Stephanie Kelley filed a complaint with California's Division of Fair Employment and Housing, alleging that her employer, Merle Norman Cosmetics ("Merle") was retaliating against her for reporting ongoing sexual harassment. One month later, Kelley went on a stress leave. Her physician cleared her to return to work as of November 15, 2010 – six months after her leave began.

On November 13, two days before Kelley's scheduled return to work, Kelley's lawyer sent an e-mail to Merle's lawyer, asking for several things before Kelley's return: a written job description; a statement of goals and objectives; and a written confirmation of her client's job title, duties, pay, and benefits. Also, even though Kelley had been out for nearly half a year, Kelley's counsel inquired about the status of Kelley's earlier request for vacation during the upcoming Christmas holiday period. Less than 20 minutes later, Kelley's attorney sent another e-mail: she wanted written confirmation that Kelley wouldn't be subject to retaliation for her complaints about sexual harassment.

Merle's counsel e-mailed the next day: Merle was willing to allow Kelley to return to work, but considered Kelley's requests to be "unreasonable under the circumstances." Merle's counsel proposed that Kelley return to work on November 30, so that Merle could prepare for her return. In a reply, Kelley's counsel offered a compromise start date of November 22. In his reply on November 18, however, Merle's counsel sent an e-mail confirming that Merle was "unwilling to meet" Kelley's conditions for returning to work, and that Merle "considers Ms. Kelley's employment to be terminated as of today, November 18." Merle's counsel sent that e-mail without ever asking whether Kelley would refuse to show up for work if she didn't receive the requested information.

Kelley filed for unemployment benefits, and several contradictory decisions followed: the Employment Development Department denied her claim for benefits; an administrative law judge reversed that decision and found that she was entitled to benefits; the California Unemployment Insurance Appeals Board reversed that decision; the Board's decision was reversed yet again by a trial court; and the Court of Appeal finally affirmed the trial court's decision, deciding that Kelley was in fact entitled to unemployment benefits.

At issue on appeal was whether Kelley "constructively quit," by insisting on conditions that Merle had no obligation to satisfy, and thus making it impossible for Merle to take her back (which would disqualify Kelley from unemployment benefits), or whether Merle fired her. In ultimately deciding that Kelley was fired, the Court of Appeal noted that Merle could have waited to see if Kelley reported to work after Merle declined to provide the requested information – and that Merle could have simply asked whether Kelley would report for work, even if Merle refused to. "In short, even if the e-mails amounted to some form of pre-litigation poker, Merle … could not simply declare itself the winner – it had to call and see whether Kelley was bluffing."

Were Kelley's requests really that burdensome? Or was it that Merle didn't really want her back? Either way, Merle needed to do more than unilaterally decide that the employment relationship was terminated. And in light of Kelley's initial claim that Merle had retaliated against her for reporting sexual harassment, the Court of Appeal's determination that Kelley was fired doesn't bode well at all.

Kelley is therefore much more than a case about unemployment benefits: it's a reminder that employers should explore all alternatives before terminating an employee who's about to return from a leave of absence.